SEC charges Mozilo.
Countrywide Financial Countrywide Financial Corporation (NYSE: CFC) is a diversified financial marketing and service holding company engaged primarily in residential mortgage banking and related businesses. CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Angelo Mozilo and two other former executives with securities fraud for deliberately misleading investors about the significant credit risks being taken in efforts to build and maintain the company's market share.
Mozilo was additionally charged with insider trading for selling his Countrywide coun·try·wide
adv. & adj.
Throughout a whole country; nationwide: launched a fundraising campaign countrywide; a countrywide search.
Adj. 1. stock based on non-public information for nearly $140 million in profits.
The SEC alleges that Mozilo, along with former chief operating officer Chief Operating Officer (COO)
The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. and president David Sambol and former chief financial officer Eric Sieracki, misled the market by falsely assuring investors that Countrywide was primarily a prime quality mortgage lender that had avoided the excesses of its competitors.
The SEC's enforcement action alleges that from 2005 through 2007, Countrywide engaged in an unprecedented expansion of its underwriting guidelines and was writing riskier and riskier loans, which these senior executives were warned might ultimately curtail the company's ability to sell them. Countrywide was required to disclose these important trends to its investors in the Management Discussion and Analysis portion of its SEC firings, but failed to do so.
"This is a tale of two companies," says Robert Khuzami, director of the SEC's Division of Enforcement. "Countrywide portrayed itself as underwriting mainly prime quality mortgages using high underwriting standards. But concealed from shareholders was the true Countrywide, an increasingly reckless lender assuming greater and greater risk. Angelo Mozilo privately described one Countrywide product as 'toxic,' and said another's performance was so uncertain that Countrywide was 'flying blind.'"